Aussie Broadband to reveal its NBN CVC allocations

Published6th, December 2017

Aussie Broadband is set to publish detail about the amount of connectivity virtual circuit (CVC) it has allocated per NBN point of interconnect (PoI). The move is likely to put pressure on much larger NBN retail service providers to be more upfront with users when it comes to service quality. While there is plenty of demand for greater transparency from both NBN Co and its RSPs, to date they have not been able to agree on who should be responsible for releasing the data.

However, Aussie Broadband has indicated it plans to make the first move. “We’ve got plans to publish our CVC graphs and allocations [per PoI],” managing director Phil Britt told a Reddit AMA.[1] “It’s currently a work in progress with our website team.”

CVC is a fee levied by NBN Co for offloading traffic from the NBN to the retail service provider’s network. Britt said the average CVC per user “on a mature PoI now is around 1.8 Mbps, [while] the overall network average is 1.3 Mbps”. “We have a couple of very large PoIs with [a] legacy customer base that pull this overall average down,” he said.

“As our customer base has moved toward the more tech savvy, the average is steadily increasing (along with the average revenue to support that).” CVC usage across the NBN is flatlining at a little above 1Mbps per user.[2] RSPs have been making more noise about the way they allocate CVC since it has been outed as one of the main constraints on NBN users not experiencing good speeds.

Last month, Telstra said it is reviewing the amount of CVC bandwidth[3] it is buying from NBN Co on a rolling weekly basis in a bid to maintain service levels – though it has not released data on how much that is. CVC remained “the most expensive bandwidth in Australia”, Britt said, and was the “primary reason” Aussie Broadband placed data limits on its products rather than offer them as “unlimited”. “It’s impossible in my view to provide a sustainable unlimited offering in the market whilst providing a modest profit to the company,” he said.

The data limits also serve an alternative purpose: making Aussie Broadband unattractive to super-heavy internet users. “Aussie are one of the very few providers that still have data limits, and we do this because it allows us to predict what people’s usage will be and it also means the super heavy users go somewhere else,” Britt said. The strategy is largely similar to that employed by iiNet after it bought AAPT[4] in 2010.

At the time, AAPT was one of very few RSPs to offer an unlimited – though heavily congested – ADSL service. Britt said CVC was also a constraint on the company offering gigabit connections on the NBN. “At this stage having enough CVC bandwidth sitting free to support gigabit connections isn’t viable but we are offering 250/100 services in some PoIs currently, and more will become available next year,” Britt said.

“NBN Co are talking about releasing a proper business grade service late next year which would enable us to provide gigabit without the CVC component so hopefully that might help.” HFC impact Britt also revealed the effect of the six-to-nine month delay to the HFC network announced by NBN Co late last month.[5]

“The HFC delay will drop our sales by around 20 percent,” Britt said. “It’s been a growing part of the business. It will have an impact.”

NBN Co is yet to provide detail of how the HFC delay will affect its own financial and rollout projections.